German-American Discourse on Politics and Culture

April 14, 2009

Review: Die Quandts by Rüdiger Jungbluth

Members of Germany's wealthiest family dynasty - the Quandt family - appear each year on Forbe's list of billionaires, but most Americans have no idea who they are and how they amassed their fortune. For decades, the Quandts have successfully kept a very low profile, even within Germany. Last year the veil of secrecy was pierced to some extent when Quandt heiress Susanne Kletten became the victim of a sensational sex-blackmail scheme.

As a banker, I had some knowledge of the Quandt empire and used to call on Quandt-controlled companies such as BMW, Altana and Byk Gulden. In New York City I got to know the husband of Colleen-Bettina Quandt (who converted to Judaism and made a name for herself as a jewelry designer), but I still had only a hazy notion of the source of the Quandt fortune.

The journalist Rüdiger Jungbluth has done a fantastic job of piecing together the incredible story of the Quandts in his unauthorized history of the family. Jungbluth writes with an engaging style and has the talent to make even the most complex stock transactions understandable and even entertaining. I couldn't put this book down.

The key figure in the Quandt family saga (and the book) is Günther Quandt, who brought the family into prominence by becoming a major supplier of uniforms to the German army in WWI. In the hyper-inflation and economic chaos of the Weimar Republc Quandt successfuly executed a hostile takeover of the battery group Accumulatoren-Fabrik AG (AFA) and took control over the munitions group Deutsche Waffen und Munitionsfabrik (DWM) just as Germany began to rearm itself. Despite his fabulous financial success in the 1920s, Günther Quandt was no fan of the Republic and joined a "study group" that explored ways to bring Italian fascism to Germany. In 1933 he joined a group of major industrialists in a secret meeting with Adolf Hitler. (I never understood why industrialists such as Peter Kloeckner, Friedrich Flick and Otto Wolff - along with Günther Quandt - were so hostile to the very Republic that enabled them to amass such vast fortunes).

Günther Quandt's personal life is no less fascinating than his business success. Jungbluth describes how, after the tragic death of his first wife, the wealthy man met and courted Magda Friedlaender - 20 years his junior. The girl was attracted by Quandt's great wealth, but was profoundly bored with marriage to the older man who was more interested in his financial investments than in his young wife. After having two sons together (one died), the couple divorced. Magda became a fanatical Nazi and married Josef Goebbels. Jungbluth describes how young Herald Quandt, a favorite of der Führer, grew up with split allegiance to Günther and to his mother and new step-father.

Günther Quandt may have found his ex-wife's choice for a new spouse distasteful, but he recognized the huge opportunity to grow his industrial empire in the Third Reich. All of his holding's florished with the enormous military contracts from the government in Berlin as Hitler armed Germany for a new war. The AFA's superior batteries were used to power Germany's U-boats, and, later, the V-2 rockets. Maintaining a full workforce was a challenge, especially once the war started, but Günther Quandt' made use of slave labor shipped in from the German-occupied territories. Later, the SS constructed a concentration camp next to the AFA plant in Hannover, and the prisoners were forced to handle lead and other chemicals without any protection whatsoever.

Günther Quandt played a major role in supplying Hitler's war machine, but after the war he managed to escape the fate of Flick and the directors of IG Farben. A court determined that he was merely a "collaborator" (Mitläufer), so very quickly he and his sons were able to reassert control over their holdings just as Germany's Wirtschaftswunder began to take off. Soon, they were again producing armaments: a Quandt firm earned enormous profits by manufacturing millions of landmines.

In the postwar era, the Quandt family's vast fortune kept growing exponentially - along with its influence on the German economy (behind the scenes, of course). As Jungbluth writes, the family was able to escape the "Buddenbrooks syndrome" - the inexorable decline of great family fortunes over time that one usually sees. Each new generation of Quandts has brought forth talented and creative managers who have found new opportunities to increase the family wealth. For the most part, the Quandt family has avoided the internal squabbles that have been the ruin of so many wealthy families. But, as Jungbluth convincingly argues, a shadow remains across the Quandts as they have refused to come to terms with the family's history during the Third Reich. There are some recent indications, however, that this too is changing.